Tropicana Corp Bhd’s chairman and major shareholder, Tan Sri Lim Wee Chai has bought RM78.47 million worth of Top Glove Corp Bhd’s shares. Lim, who holds an 11% stake in Tropicana, is also the chairman and founder of Top Glove, where he controls 25.68%.
In a filing at Bursa Malaysia, Tropicana said it had bought 11.25 million Top Glove shares “at prevailing market prices from the open market”, via its indirect wholly-owned Desiran Reality Sdn Bhd using internal fund.
The acquisition, the property developer said will allow the company to capitalise on the glove maker, which has favourable long-term prospects amid the increased global demand for its products.
In a statement, Tropicana said the acquisition can allow it to benefit from the prospects of the manufacturing and trading of gloves which is largely contributed by the increased demand globally for gloves due to the ongoing Covid-19 pandemic and also the growth in the global healthcare services industry.
Shares of Top Glove, whose subsidiaries are being investigated by the Government over worker housing issues, have been under pressure recently. In addition, the news of vaccine discovery, which has weighed on the stock, a surge of Covid-19 infections among its workers that resulted in the temporary closure of 28 of its factories has also affected its share price.
To further reduce the decline of its share price, Top Glove has been on a share buyback spree. Since September, it has spent RM1.28 billion for the exercise, and another RM69.94 million for the latest acquisition. The total is equivalent to about 68% of the RM1.87 billion net profit it made for the financial year ended Aug 31, 2020.